Council gets details regarding $100,000 claim against city

December 7, 2012

Even though it sits on the shore of Lake Erie, the city of Dunkirk has considerable expense involved in getting that water cleaned and sent to its residents and outside customers.

The painting of the water storage tank that sits at the corner of Roberts Road and Benton Street is one of those costs - still to be fully resolved since the contractor claims it finished the job properly in 2010. Cheektowaga firm Amstar of Western New York filed a notice of claim that was on Common Council's agenda for consideration recently.

Fourth Ward Councilwoman Stacy Szukala said she wanted to know more about issues concerning the claim, including why it's taken so long to get to council.

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OBSERVER Photo by Gib SnyderCity Attorney Ron Szot explains to Common Council the claim for $99,900 submitted by Amstar of Western New York for its work painting the water storage tank.

"It's been a year and a half since the tower's been painted and I just don't understand why we're just receiving this now to discuss," she stated.

City Attorney Ron Szot replied that a contract was let and services were supposed to be provided at a certain level and be done by a certain date.

"There's a difference of opinion as to whether those services were rendered in full, on time and to spec. And you're right, I think the project was 'completed' around August 2010, so there's a lot of issues that exist from a legal perspective on what damages, if any, still exist. The project was about $153,000 or so. About $53,300 had been paid," he explained.

"Just in general, liquidated damages ... is just a mechanism where if someone breaches a contract the party that's damaged or hurt can seek payment for those damages. Sometimes it's hard to quantify how much it costs or what the damages are."

Szot explained in this case the city and contractor agreed in advance to a certain set of liquidated damages and what the hypothetical damages would be.

"There's a lot of differences of opinion between, like I said, what was done, when it was done, and how to spec it was done," he added.

Szukala asked where the city was with Amstar's attorney and where Hill Engineering, the city's engineering firm at the time, fit into the equation.

"Hill oversaw the project, they're sort of our experts. They gave us the oversight and everything relative. Where it ultimately resolves itself, that's the to-be-determined part," Szot replied.

Third Ward Councilman Adelino Gonzalez asked if Amstar was being paid even if some part was not completed.

"I'm not speaking for them, but I presume they believe the job was done on time and to spec and that they're entitled to a certain amount of money," Szot replied. "Our expert, the city's engineers, have said for the last two years and two months that that's not correct."

Second Ward Councilman William J. Rivera asked if the work was under the consent order the city is under to upgrade its water system and if it was done according to terms of the consent order.

Department of Public Works Director Tony Gugino replied that it was done under the consent order but not to its terms.

"Their contention is yes, our contention is no. I'm not going to say too much because it's an ongoing, fluid issue," Gugino added. "It's real simple. They had a timeline, they were over that timeline by hundreds of days, There's a fine ... every day late prior to them completing, or even they acknowledge substantial completion. Therein is the crux of the legal issue. I chose not to dispense the money."

Council voted to officially forward the claim to Szot's office.

After the meeting Szot said the city is still "trying to dig through exactly where everything stands."

"Hopefully, in the next short period of time, we'll be able to have some discussions with the contractor's representatives and see if we can come to some meeting of the minds."

Another water-related item was the subject of a Szukala question when she asked about the city's progress seeking outside funding on the proposed Lake Front Boulevard seawall project.

Mayor Anthony J. Dolce said the city has not received any help yet.

"If we could just get a little bit of help as far as grants go, we could fund the rest out of our operating budget," he added. "We know we have a limited time frame. That permit expires next year but my thought is this is something we need to do our best to fund out of our operating budget instead of having to additionally bond for it."